Instead Atlantic announced that it has raised its stake in Jascan to 23.5% by acquiring 4,527,718 common shares under a private agreement with Kash Investments of New Brunswick. While Atlantic has not disclosed how much it paid for the shares, it may buy more depending on market conditions.
The decision not to go ahead with the amalgamation comes just after control of Atlantic passed to New Brunswick investor Ronald Goguen. Through Kash Investments, Goguen recently acquired a 19.7% stake in Atlantic from Scottish finance house Waverley Mining Finance.
President William Burton is Atlantic’s second largest shareholder with 900,000 shares.
The decision not to merge was taken even though a share exchange ratio for the proposed amalgamation was recently described as fair and reasonable by Midland Doherty of Toronto.
Midland Doherty approved an exchange ratio of one Atlantic share and between 1.35 and 1.40 Jascan shares for each share of the amalgamated company.
“If the merger had taken place, there would have been no controlling shareholder and the company would have been vulnerable to a takeover bid,” said Burton.
After selling their respective interests in the Noxon silver-copper deposit in Montana, Jascan and Atlantic each have at least $10 million cash in their treasuries.
An immediate priority for the two companies is the rationalization of their respective assets the Dawson gold property in Colorado where reserves are estimated at about 500,000 tons grading 0.25 oz gold per ton. Atlantic holds a 40% interest in the property while Jascan retains a 60% stake.
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